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Review By Dilip Davda on Mar 4, 2015
Mahabir Metallex Ltd (MML) is in the business of trading and distribution of steel products like TMT Bars, Rolled Products, Billets, Colour Coated Sheets, Steel strips/ Cold Rolled Strips, Round Angle Channels & Bars, Ingots and Steel Pipes and Tubes.
The company will buy the material from various manufacturers and further sell and distribute the material to various consumers like real estate developers, capital goods manufacturers, scrap holding manufacturers etc. in National Capital Region. Company’s product offerings will include ready to use steel, primarily re-bars to be used in construction activities in various Sector like roads, power plants, housing, bridges, metros, monorails etc.
To part finance its long term working capital and corpus fund needs, the company is offering 3900000 equity share of Rs. 10 each at par to mobilize Rs. 3.90 crore. The issue opens for subscription on09.03.15 and will close on 12.03.15. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. Issue is solely lead managed by Sarthi Capital Advisors Pvt Ltd and Bigshare Services Pvt Ltd is the registrar to the issue. Post allotments, shares will be listed on BSE SME platform. The company issued preferential equity to promoters at a price between Rs. 30 and Rs. 50 between August 2006 and March 2010 and then issued bonus in the ratio of 12 for 5. Again in 2014, it issued preferential equity at a price of Rs. 15 to reach its current equity of Rs. 6.53 crore that will rise to Rs. 10.43 crore post this issue.
The company has posted an average EPS of Rs. 0.035 for last three fiscals. For the first half of current fiscal ended on 30.09.14, it has earned net profit of Rs. 0.02 crore on a turnover of Rs. 0.83 crore. Based on this if we annualized the earnings, then the asking price is at a P/E of 250 on fully expanded equity post this issue.
Merchant banker has average track record so far.
This at par SME offer is at higher P/E. Due to entry barriers, low preference for SME IPOs by the broking community at large. However, investors with surplus funds may invest at their own discretion for long term, bearing in mind that stock market investments are linked to market risks. The author has no plans to invest in this IPO.
Review By Dilip Davda on Mar 4, 2015
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor before making any actual investment decisions, based on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the past, SME IPOs drew the attention of investors across the board. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at own risk. The above information is based on information available as on date coupled with market perceptions. The Author has no plans to invest in this offer.
(SEBI registered Research Analyst-Mumbai).
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detail fundamental and financial analysis of companies coming up with IPO helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
Email: dilip_davda@rediffmail.com
The initial public offer (IPO) of Mahabir Metallex Ltd offers an early investment opportunity in Mahabir Metallex Ltd. A stock market investor can buy Mahabir Metallex IPO shares by applying in IPO before Mahabir Metallex Ltd shares get listed at the stock exchanges. An investor could invest in Mahabir Metallex IPO for short term listing gain or a long term.
Read the Mahabir Metallex IPO recommendations by the leading analyst and leading stock brokers.
Mahabir Metallex IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Mahabir Metallex IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts in the above answer.
Our recommendation for Mahabir Metallex IPO is to subscribe for long term.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe for long term to the Mahabir Metallex IPO.
The Mahabir Metallex IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Mahabir Metallex IPO allotment status to check.
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